Budiman, Engkus, Fadjar Tri Sakti, Salamatul Afiyah, Nurmawan
The problem behind this research is that the amount of core capital of the Garut Microfinance Institution (LKM) has not been fulfilled, which comes from the capital participation of the Garut Regency Government as the majority shareholder. This is an obstacle for PT LKM Garut in spurring its performance as a Regional Owned Enterprise (BUMD) which is expected to be able to support the development of Micro and Small Enterprises (SMEs) and reliable contributors of Regional Original Income. As a relatively young financial institution as a result of consolidation in 2014, PT LKM Garut periodically requires additional capital deposits from the owner, in accordance with a predetermined scheme. This study aims to examine and provide advice on the ideal amount of capital participation per fiscal year, which should be realized by the Garut district government at PT LKM, as well as the projection of dividends for the owner as a result of the investment. This research uses descriptive verification method with a quantitative approach, based on the 2014-2018 PT LKM financial report data. Based on the results of the evaluation, in general, the financial performance of PT LKM Garut in 2014-2018 shows a positive development. This is indicated by the growth of assets from Rp. 16.40 billion to Rp. 38.37 billion; Credit distribution from Rp. 12.16 billion to Rp. 32.60 billion; Savings from Rp. 8.53 billion (2016) to Rp. 11.28 billion (2018) and deposits from Rp. 11.86 billion to Rp. 17.60 billion (2018). From the health aspect, during that period, PT LKM Garut was also in the Healthy category as shown by its achievements: Capital Adequacy Ratio (CAR), Earning Asset Quality (KAP), Non-Performing Loan (NPL), Cash Ratio, Comparison of Operational Costs and Operational Income (BOPO), Return on Asset (RoA) and Loan to Deposit Ratio (LDR). This development has consequences for the increasing need for realization of equity participation from the owner. In order to improve the performance and profitability of PT LKM, the Regency Government is advised to make a minimum capital deposit of Rp. 1 billion.